Bank Islam Malaysia Berhad today signed an agreement with Felcra Berhad, the agency responsible for the development of the rural community, to provide RM100 million Bai Bithaman Ajil (BBA) corporate financing facility.
The agreement will commence on 28th March 2006 and will enable Bank Islam to finance Felcra projects and further boost the bank’s efforts in boosting its corporate financing activities.
The agreement was signed by Datuk Noorazman Abdul Aziz, Managing Director of Bank Islam and Datuk Hamzah Zainudin, Chairman of Felcra.
Under the BBA, Bank Islam will provide bilateral financing to Felcra Berhad for a period of up to 10 years.
The scheme offers deferred payment whereby the bank will finance customers who wish to acquire on asset but to defer the payment of the asset for a specific period or to pay by installment.
Under this facility, the bank shall first purchase the asset concerned and subsequently sells the relevant asset to the customer at a selling price which comprises the actual cost of the asset to the bank plus the bank’s margin.
“The financing package offered to Felcra is to provide greater convenience to our customer while at the same time form the basis of a long partnership between the two organisations,” Noorazman said.
“Through this offering, Bank Islam is able to reduce the customer’s risks against interest, fluctuation base lending rates (BLR) by using a method of sale with a deferred payment plan-monthly installment.”
Noorazman said Bank Islam plans to focus on customized and innovative package financing programmes to conglomerates in the future.
Bank Islam recently signed an MOU with Kumpulan Darul Ehsan Bhd (KDEB) to offer two attractive loan packages for staff of KDEB and subsidiaries as well as its house purchasers.
FELCRA’s Hamzah said: “We are proud to be associated with Bank Islam, as they are one of the most prominent Islamic banks in Malaysia.
“With competitive price and financing structure offered, we are very optimistic that the relationship would be of great benefit to us and our subsidiaries.”
FELCRA Berhad is a Company wholly-owned by the Government and incorporated by Ministry of Finance. Formerly it was known as Federal Land Consolidation and Rehabilitation Authority with major role to develop rural sectors and assist the community in contributing towards national economic activities, while improving their quality and standard of living.
Backed by the experience gained in estate management and its core activities, FELCRA Berhad today is diversifying its activities, going into industrialization, new services and trading.